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Recession-Proof Real Estate Investing

This easy-to-follow guide will show you how to make money during all of the market’s twists and turns! Accomplished investor J Scott dives into the theory of economic cycles and the real-world strategies for harnessing them to your advantage.

Real Estate Investor from Rochester Hills, Michigan

replied over 9 years ago

The majority of MI is good - some cities you have to look out for like Pontiac MI - but Detroit is actually very pro - landlord - actually they are very fair in my opinion - I don't think they lean either way. If your an A$$ of a landlord you won't win and if your tenant is one - they won't win.

A shock I know considering Mike's comments and the political history of the city.

Real Estate Investor from San Jose, California

Residential Real Estate Broker from Grand Blanc, Michigan

replied over 9 years ago

I second what Scott says about Michigan. I have rentals in the city of Flint and don't have many problems. If you follow the rules, you won't have issues. As soon as you start trying to pull funny stuff you'll have problems to deal with. But, that could be said about investing anywhere...

Real Estate Investor from Poway, California

replied over 9 years ago

I know first hand that Ohio is cool, but the tenant doesn't pay utilities, so this will sneak up and crack you in the back of the head. MS, Jackson, MS to be exact is one of my favorite states. Easier than TX (in my opinion) to evict, if you can believe that. I can have a tenant esc :roll: orted out by the police within 3 weeks or less if I stay on top of the paper work and filings. Tenant pays all utilities!! ALL! HA And the bills follow the tenants. Little details.

Real Estate Investor from North Carolina

Almost as important as state laws are local codes, regulations and neighborhood organizations.

Don't invest in Historic Districts. See how active any neighborhood associations are. Who gets fined if your tenant's yard violates city codes?

Around here no more than 3 unrelated people can live in a house. Do they enforce that on the other side of the tracks? NO. Around here driveways cannot be dirt. Do they enforce that on the other side of the tracks? NO.

We have one magistrate who leans over backwards to give tenants the benefit of the doubt. We have another magistrate who is ZERO TOLERANCE.

from Lexington, Kentucky

I know first hand that Ohio is cool, but the tenant doesn't pay utilities, so this will sneak up and crack you in the back of the head.

I'm not sure what you meant here, but my tenants certainly pay their utilities. I would never buy a property if I were paying gas and/or electric.

Mike

Mike,

Assuming you up the rents accordingly, to cover the cost of utilities and effectively "re-billing" the utilities, why would you "never" buy a property where gas and electric were paid by the landlord? Also it can provide a value add opportunity in some situations to get it switched. - Just wondering what your logic is here.

Property Manager from Atlanta, Georgia

replied over 8 years ago

Georgia is definitely pro-landlord. In fact when you go to court for an eviction, the first thing they do before the judge comes out is the bailiff plays a recorded video. The video basically says that if you are a tenant and you did not pay rent then you will loose the case. Failure of landlord to do repairs is not a valid reason for not paying rent in the state of Georgia. When judge comes out, she reiterates what was said in the video, judge calls the court calendar to see which sides are present, then she calls a recess and sends everyone out in the hallway for tenant to talk to landlord to work out an agreement. Judge says if you can't work out an agreement and you case comes up then the tenant will loose if they owe money.

from Cody, WY

from Orlando, Florida

replied over 8 years ago

I think generally Florida is pro-landlord. Maybe there are some rent control laws in individual municipalities, but not where I live. If you're concerned about asset protection & privacy (land trusts) it's one of the best states to live in, if not the best.

I have rentals in 3 states and wanted to bring up Hawaii. Unlike in San Diego which has been one nightmare after another and Houston which has also caused me a good amount of lost sleep, on 5 properties in Honolulu (big and small) I've never once in 7 years had to evict or even consider evicting a single tenant. Also, I've rarely had a place sit vacant longer than a couple weeks. It is still a very challenging place to do business. The Hawaii General Excise Tax (GET) for example is a real pain in the butt and takes 4.5% right off the top of gross rent (no deductions allowed). Fortunately property taxes are amazingly low (like .25% of the home's value give or take) which helps make up for it. Another issue for some is unless you live in Hawaii, you have to hire a professional manager to do your work. Oh, these are regular homes, not vacation rentals. The biggest downer is you cannot turn a regular home into a vacation rental which would be so nice to do given the location. You have to buy one that is already zoned for it. Unfortunately, for what it cost to maintain even a modest vacation rental, you might as well just save the cash, fly to Hawaii 1st class and rent a corner suite at the Hilton a month out of the year. Any kind of ownership with the word vacation attached to it should be looked at very, very cautiously and in most cases probably treated like bubonic plague (at least from a financial perspective). And that's my scoop on Honolulu, Arguably better for landlords than Houston, way better than San Diego. Although, given the choice on where to actually live, I still choose San Diego.